- The Reserve Bank of India (RBI) actively monitors and manages pressures on the Indian rupee to curb excessive volatility in the foreign exchange (forex) market. - Depreciation pressures on the rupee stem from macroeconomic factors such as global capital outflows, shifting US monetary policy, geopolitical tensions, and trade deficits. - The RBI utilizes its robust foreign exchange reserves to intervene in the forex market, smoothing out sharp fluctuations without targeting any specific exchange rate. - Managing forex volatility is crucial for maintaining macroeconomic stability, controlling imported inflation, and preserving investor confidence. - **Reserve Bank of India (RBI):** India's central banking institution, which controls monetary policy, regulates the banking system, manages foreign exchange reserves, and ensures financial stability and currency management. **Introduction** The article from The Hindu explains the Reserve Bank of India's (RBI) concerns regarding downward pressures on the Indian rupee and the various policy measures it employs to curb excessive volatility in the forex market, balancing stability and external trade competitiveness. **Core Issue and Detailed Points** - The Reserve Bank of India (RBI) actively monitors and manages pressures on the Indian rupee to curb excessive volatility in the foreign exchange (forex) market. - Depreciation pressures on the rupee stem from macroeconomic factors such as global capital outflows, shifting US monetary policy, geopolitical tensions, and trade deficits. - The RBI utilizes its robust foreign exchange reserves to intervene in the forex market, smoothing out sharp fluctuations without targeting any specific exchange rate. - Managing forex volatility is crucial for maintaining macroeconomic stability, controlling imported inflation, and preserving investor confidence. **Key Statutory Bodies, Acts & Concepts** - **Reserve Bank of India (RBI):** India's central banking institution, which controls monetary policy, regulates the banking system, manages foreign exchange reserves, and ensures financial stability and currency management.